Anne Arundel laments the loss of state workers

The Maryland Department of Housing and Community Development is headquartered at 100 Community Place in Crownsville (above); workers will be moving to New Carrollton.

The Maryland Department of Housing and Community Development is headquartered at 100 Community Place in Crownsville (above); workers will be moving to New Carrollton. (Barbara Haddock Taylor / The Baltimore Sun)

Nicole Fuller, The Baltimore Sun

A reshuffling of state office space will move nearly 400 workers from around the state capital to Baltimore and Prince George's County — a shift that Gov. Martin O'Malley's administration hopes will spur development around the new offices and make their operations more efficient.

But some Anne Arundel County officials are criticizing the moves as politically motivated, saying that state officials didn't consider the impact on the local economy.

O'Malley, a Democrat, plans to relocate the Department of Housing and Community Development — and about 330 workers — from Crownsville to a new building in Prince George's County as part of a development strategy to cluster commuters around transit hubs. The state has agreed tentatively to a $48 million, 15-year lease at the new property.

The governor also intends to move the Higher Education Commission and its 50 employees from Annapolis to Baltimore, where the Maryland State Department of Education is located. The commission's relocation was first announced last month. The state Board of Public Works is expected to consider a $2.4 million contract to design the new space on West Baltimore Street on Wednesday.

Anne Arundel County Executive John R. Leopold, a Republican who runs the largely GOP county, questioned whether the deficit-plagued state should take on such costly relocations. He also noted that he wasn't consulted about either move and that he suspected they were motivated by politics. Prince George's County and Baltimore City are considered Democratic strongholds.

"That's the kind of thing you discuss with the government that is losing this space," said Leopold. "The governor believes it's appropriate to waste taxpayers' money when state resources are severely limited. Moving state employees around like pawns on a chessboard during a time of economic distress is not a prudent approach."

O'Malley has promoted the housing department's planned relocation as a way to build a transit-oriented development in New Carrollton, near the Purple Line light rail. The department's headquarters — Prince George's first state agency — would move to a new building that also would include retail and residential space. Last month, the governor discussed the details of the 700,000-square-foot facility, calling it "a modern investment in a modern economy."

Takirra Winfield, an O'Malley spokeswoman, said the long-term savings from relocating the agency, which works on foreclosure prevention and neighborhood revitalization, to an area that has been hit hard by the housing crisis and that also has access to public transportation would far outweigh any upfront costs.

"This is by no means a political move," Winfield said. "It's about smart growth. It's about jobs, about bringing the agency closer to the community it serves the most. The short-term costs are worth it. There's definitely savings in the long term."

The housing department is scheduled to move by 2013.

The Higher Education Commission is planning to move to the state education department in Baltimore in November. State officials have long discussed a possible merger, and those talks continue.

While the losses represent a small portion of the 8,000 state workers based in Anne Arundel, Leopold and other Anne Arundel officials said any loss of workers — and a customer base for neighboring businesses — can hurt, especially in a down economy.

Kenneth Vogel, who owns the western Annapolis building that has housed the Higher Education Commission for the past decade, said the move took him by surprise. He said he recently agreed to lower the $41,000 monthly rent.

"This guy from the state called up and said, 'We're canceling our lease,'" said Vogel, who has owned the single-story building near the Westfield Annapolis Mall for about 15 years. "I said, 'Did you take into consideration that you're going to have to pay a fee to break the lease?' He said, 'No, that's somebody else's job in the agency.' It was stunning."

State Sen. James E. DeGrange, a Democrat who represents Anne Arundel, said he opposes the housing department's move in particular, questioning the fiscal implications.

"If you've got a facility that's already here, why are you going to go out and pay rent? That just doesn't seem to make good fiscal sense to me."

Shiva Reddy, who manages a Subway shop near the department's Crownsville headquarters, says he draws more than 100 state workers for lunch each week, and he's bracing for a lighter lunchtime trade. For weeks, Reddy said, he has heard the agency's workers griping about the move. He said some have claimed they would quit rather than take on a long commute.

"It will definitely affect business," said Reddy, who said he may have to lay off employees if the business is not able to lure other customers. "They have a cafeteria in their building, but my stuff is more healthy."

"The governor right now is a Democrat," Reddy added, "so maybe if they get a Republican in there, they will change their mind."

Robert L. Hannon, CEO of the county's quasi public-private Economic Development Corporation, said the impact on Anne Arundel's local economy would be tough to quantify. While the higher-education agency's shared space is on real estate that would likely bounce back quickly, a short-term void would be felt, he said.

"The measure of economic activity in the area is pretty robust," Hannon said. "Except for the short-term interruption, the business community in that area isn't going to suffer any long-term economic repercussions. But anytime that a tenant or governmental agency leaves a jurisdiction, it's an event that you work to avoid."

The fate of the 600-acre, state-owned site in Crownsville, which now houses the housing department, is less clear. Leopold has long lobbied for county control over the property, though the campus setting along a historic roadway gives it minimal development value.

House of Delegates Speaker Michael E. Busch, a Democrat who represents parts of Anne Arundel in the General Assembly, said he accepted the state's reasoning for the agency moves and that he would closely monitor plans for the Crownsville building.

"I don't think anyone wants to see a vacant building sitting there," said Busch. "It will be utilized by the state, county or some other agency, or someone's going to be paying us rent."

Aubrey D. Thagard, assistant deputy chief administrative officer for economic development and public infrastructure for Prince George's County, said the new housing department location would stimulate the local economy and bring valuable services to a community that needs them. The county has one of the highest numbers of foreclosures in the state.

"This will bring some very needed services to a county that's experienced, in this economic downturn in the housing market, some hardships," said Thagard. "We do have communities that need revitalization in terms of housing. The relocation will be a critical piece of our revitalization."

And, Thagard added, the location is at the crossroads of the Washington Metro, MARC and Amtrak, as well as county buses. "We have more transit options in Prince George's County than Anne Arundel and Crownsville," Thagard said.

Del. Barbara A. Frush, a Democrat who represents parts of Anne Arundel and Prince George's County, noted that the relocation costs would be funded through the capital budget — and wouldn't affect the state's annual budget that has been hampered by years of revenue shortfalls.

"I don't really feel that Anne Arundel County is losing a great deal," said Frush. "I believe it's Prince George's turn to have that kind of facility in the county. There are a number of state agencies in Anne Arundel County. We do quite well. To spread it out is fair and equitable."